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Prosecution moves to mayor's dealings with Home Depot in Ray Nagin corruption trial on Tuesday

In Ray Nagin trial, deals with Home Depot take center stageFederal prosecutors went into detail about former New Orleans Mayor Ray Nagin and his family's business dealings with Home Depot. U.S. Attorneys also brought in home builders from Dallas, Texas who testified that the Nagin's lived in townhomes in a Dallas suburb rent free for 18 months.

Sarah Price, former senior manager at Home Depot, reviewed for the jury a series of internal emails in which she expressed concern that about the mayor's interest in pursuing contracts.

The first internal email shown to the jury from a Home Depot official, dated Dec. 27, 2006, mentioned that Nagin left a voice mail for Home Depot's southern division head asking to discuss potential bids for Stone Age. In response, Home Depot senior manager Eric Criss wrote, "These guys better be damned careful. Didn't we just get an incentive from New Orleans?"

Price testified that indeed, Home Depot had received an incentive from the city. In her email response, Price wrote that it was "dangerous to use an elected official family business."

But at the time Home Depot was also negotiating a community benefits agreement championed by Councilwoman Stacy Head, that would have required the store to employ neighborhood residents at above-market rates and offer them health benefits and a 401k retirement plan. According to Price, "there was a lot of back and forth" about the agreement, which Home Depot was never inclined to support.

Price testified that on Jan. 29, 2007, she received an email saying that Nagin had called "to offer Home Depot his full support." Price told the jury that hours later, she sent a fax to Head, discontinuing the community benefits agreement.

As prosecutors walked the jury through the email chain, Price testified that Nagin's interest in forging a business relationship with Home Depot "raised a red flag."

In an email correspondence in late January 2007, Home Depot Chief Executive Officer Frank Blake wrote to the corporation's vice president of governmental affairs and lobbyist Kent Knutson alerting him that Nagin had called, and asking for advice on how to proceed.

"Kent, got a voicemail from Mayor Ray Nagin saying he understands we have a problem with a neighborhood group, and asking whether we need his assistance. Do you know what this is about?"

Knutson, who took the stand after Price, responded to Blake that "most likely, it's about Nagin's son's desire to be a vendor to Home Depot to install kitchens/countertops for us using a company that he and his dad own together. Knowing how New Orleans operates, the mayor will be certain to plug his family business."

But in a separate email to his associates, Knutson was more frank about Nagin's tactics.

"There is NO REASON for our CEO to be involved with this," Knutson wrote, referring to Home Depot dealings in New Orleans both with Nagin and groups promoting the community benefits agreement, who each were asking for more from the company. "These people are shake-down artists."

Nagin's defense attorney Robert Jenkins sought to complicate the picture by asking Knustson about Head's advocacy for the community agreement, while stressing that the mayor only indicated he would help the company with its store.

"It
wasn't the mayor of New Orleans who was trying to push the community benefits
agreement, it was Stacy Head, correct?" Jenkins asked. "Yes," Knutson replied.

Assistant U.S. Attorney Matt Coman followed up by asking Knutson what Head wanted.

"Community benefits," Knutson replied.

"What did Ray Nagin want?"

"Contracts for Stone Age, from Home Depot," Knutson said.

Former city chief development officer Donna Addkison also took the stand Tuesday, and testified that Nagin initially opposed lowering the sale price of city-owned streets Home Depot needed to build the Central City store from $850,000 to $100,000. Ultimately, Nagin changed his mind.

During cross-examination, Jenkins prompted Addkison to admit that the sale of streets at a reduced price was unanimously approved by a New Orleans City Council vote.

Former Home Depot regional manager and installation manager Cane Womack proceeded to testify that he spoke with Nagin in late December 2006 at the direction of Home Depot Regional Vice President Dan Paris. Womack told the jury that Paris said the mayor was interested in a granite contract, and that "it can't hurt to have the mayor on our side."

Nagin wanted 10 to 20 installation jobs per week for Home Depot, for roughly $3,500 to $4,500 each week. But Womack said Stone Age was woefully under-qualified.

Womack explained that Home Depot issued Stone Age a badge to perform installation work for the retailer despite the fact that he was unimpressed with the company, and that Stone Age consistently "underperformed."

"We were trying to reopen stores and get New Orleans back, help the community," Womack told the jury. "You tell the mayor no, it could cause some problems for you."

Originally, Womack said, Stone Age was given only two or three stores, but less than a year later Nagin asked to expand to more.

Womack recommended granting the expansion request. In an email to Paris he wrote, "Given the political nature of this relationship, I think it's better to move forward."

Womack said that in his 18 years at Home Depot, Stone Age was the only company ever "brought to me from the top."

Jenkins, however, got Womack to agree that Nagin never threatened any adverse consequences for Home Depot if the company rejected Stone Age.

Prosecutors also called Patricia Stoddard, a longtime Home Depot employee who worked under Womack, and oversaw the Stone Age contract, as testimony continued on Tuesday.